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Blackstone owns 50% equal Working Interests in Strawn; with Eagle Natural Resources, who also is acting as Operator on the Project. Strawn is located in Young and Archer Counties, Texas, approximately 200 km west of Dallas; and consists of 27 existing wells, most of which are not currently in production due to recent lower oil prices and historic low levels of maintenance (6 are currently producing). The Project is some 1,300 acres spread over 7 established leases which are documented in accordance with local requirements. The projects objective is to initiate a detailed program of maintenance and workovers in order to increase the current rate of oil production, as the wells were producing just five barrels per day at acquisition. The Project has previously produced at rates of over 600 barrels per day and has certain production facilities in place. Assets include equipment such as pump jacks, small tank farms and other infrastructure which were included in the acquisition price. The total joint acquisition price for 100% of the project was $150,000 with each Working Interest Partner having a 50% ownership. Total transactional costs to Blackstone included an additional approximate $30,000. Approximately $300,000 jointly has been spent on maintenance and site workover plan. Blackstone intends to fund additional Strawn working capital if needed from Use of Proceeds of this offering. In order to assess the resource potential on the leases, the Operator’s technical team will examine aspects of the Project by applying a number of modern exploration techniques, which had not previously been exploited. The leases are “held by production” and typically Working Interests in these type of projects continue as long as revenue exceeds operating cost; which is mainly a function of budgeting in operations and variable oil prices. Based on current production, the project anticipates the field will produce 5-10 barrels per day for the foreseeable future.
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